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Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
Americas+1 212 318 2000
EMEA+44 20 7330 7500
Asia Pacific+65 6212 1000
By Katie Arcieri
A verdict finding the National Association of Realtors and other industry players liable of colluding to inflate brokerage commissions in Missouri has emboldened the plaintiffs’ attorneys to pursue a far more ambitious case.
The proposed class action, filed Tuesday against NAR as well as other seven defendant brokerages including Compass Inc., Weichert Realtors, and Redfin Corp., would cover all home sellers across the US who paid commissions over the last four years, and seek damages of more than $100 billion.
The new lawsuit came the same day a jury awarded $1.8 billion in damages to sellers in Missouri who accused the association and related brokerages of colluding to maintain high commissions, adding to a series of lawsuits seeking to curb how real estate agents are paid.
Mike Ketchmark, lead attorney for the plaintiffs at Ketchmark and McCreight, said verdict in Missouri spurred him to file the larger suit against the association, calling it a “day of accountability.”
“As the verdict was being read, I turned to my co-counsel who was in the courtroom and I gave him a nod of my head and said ‘Let’s go.’ And at that moment in time, we filed the nationwide class action lawsuit,” Ketchmark said on Wednesday. “David swung the stone at Goliath, and we knocked him over. We were like, ‘OK let’s do it again.’”
Ketchmark said the nationwide suit, filed in the US District Court for the Western District of Missouri, seeks damages “in excess of $100 billion.” It would compensate the class of people who sold a home on a multiple listing service and used a broker affiliated with one of the defendants, starting from Oct. 31, 2019, until the present.
NAR said on Wednesday that the new lawsuit “appears to be a copycat lawsuit.”
“We continue to assert that the practice of listing brokers making offers of compensation to buyer brokers is best for consumers,” the association said in a statement. “It gives the greatest number of buyers a chance to afford a home and professional representation, while also giving sellers access to the greatest number of buyers.”
The Justice Department’s Antitrust Division is also investigating practices in the residential real estate brokerage marketplace, and whether sharing commissions needs to be banned. There is another large class action suit against NAR that is pending in Illinois and set for trial in April 2024, Ketchmark said.
Read More: US Realtors’ Lucrative Fee System Faces Mounting Antitrust Risk
Ketchmark said the goal of the nationwide case is to consolidate and centralize any other potential follow-on suits. “We took the first shot across the bow yesterday, and we are not going to stop until [NAR] is broken up,” Ketchmark said. “These real estate corporations have been rigging the system against homeowners.”
NAR spokesperson Mantill Williams said the organization will appeal the Missouri jury’s verdict, and in the interim ask the court to reduce damages awarded by the jury.
“We will continue to focus on our mission to advocate for homeownership and always put consumer interests first,” Williams said in a statement. “It will likely be several years before this case is finally resolved.”
NAR has previously defended the commission structure by saying it opens the door to first-time home-buyers, especially from minority and lower-income groups.
But Ketchmark said NAR, which controls multiple listing services, or MLS, nationwide, enforces and abuses a rule that requires home sellers to make an offer to a buyer’s agent. On average, buyers might sell two or three homes in their lifetime and NAR “has taken advantage of the lack of sophistication of consumers,” Ketchmark said. “It’s a corporate cartel.”
Redfin, which has paid more than $13 million in dues to NAR, said earlier this month it is ending its support of the organization.
The plaintiffs are represented by Ketchmark and McCreight PC, Williams Dirks Dameron LLC, and Boulware Law LLC.
The case is Gibson v. National Association of Realtors, W.D. Mo., No. 4:23-cv-00788, 10/31/23.
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Home Sellers Seek $100 Billion From Realtor Groups (Correct) – Bloomberg Law
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